Diversification is quite possibly one of the single most powerful tools at an investor’s disposal. Savvy investors can mitigate risk by making sure to spread out their investments across as many different economic sectors as possible. However, as the Financial Crisis proved, when the U.S. economy is on shaky ground, stocks across all sectors typically suffer.
It can be extremely difficult to predict which economies will be impacted by economic downturns. Just a couple of years ago, China’s economy was the envy of the world, and now it is the primary source of global concerns. In 2014 when oil prices were above $100 per barrel, few could have predicted the impact that a collapse to under $30/bbl would have on the economies of producers like Saudi Arabia less than two short years later.
The lesson to be learned from the unpredictability of global economic conditions is that investors shouldn’t put all their eggs in one country’s basket, even the U.S. economy.
Invest In The World
If you’re looking for a great way to diversify your investments globally, Stash’s “Global Citizen” ETF, more commonly known as the Vanguard Total World Stock (ETF) VT 1.61% might be worth a look.
The ETF is nicknamed “Global Citizen” because it includes shares of more than 7,000 different companies that operate in a range of sectors in 47 countries around the world.
Which Companies Are Included?
The top holdings in the “Global Citizen” fund are…
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